Military Advisory Council fears big cut in ship repair force

Upward of 6,000 local jobs could evaporate this year because of Navy budget shortfalls caused by failure on Capitol Hill to enact a defense-spending bill, the San Diego Military Advisory Council predicted.

Those job losses stemming from the delay over 2013 defense appropriations include layoffs for as much as half of San Diego’s ship repair force, the military and defense industry group said Friday.

Its analysis was based on Navy plans announced last week detailing the impact in San Diego of reduced operations and maintenance spending.

That economic pain is just the beginning, however, if additional cutbacks proceed as expected under “sequestration,” the council warned, echoing recent statements by Navy and Marine Corps leaders.

If Congress doesn’t act, nearly $600 billion over a decade in across-the-board, automatic cuts to defense spending are scheduled to begin March 1.

In San Diego, where one in four jobs and $30 billion annually is tied to military spending, sequestration could mean furloughs and a 20 percent pay cut this year for 25,000 Defense Department civilians, the council said.

It also would seriously limit the Navy’s ability to operate San Diego-based aircraft carriers and amphibious assault ships, making the threat of a “hollow force” hobbled by inadequate training and equipment a reality, the council said.

Military paychecks will be unaffected, the service chiefs have said. But the Navy announced last week plans to delay $219 million in repairs on 10 surface ships and $83 million in aircraft maintenance this year in San Diego.

Three military construction projects will also be deferred: a $76 million barracks and a $2.5 million helicopter simulator facility in Coronado, and a $59 million training center for crews of littoral combat ships.

Larry Blumberg, executive director of the advisory council, said, “we’ve been beating the sequester piñata to death,” while underestimating the snowball effect of the delayed 2013 spending bill and what Secretary of Defense Leon Panetta called the “perfect storm of fiscal uncertainty.”

Now however, “we are pretty certain the sequester is going to happen,” Blumberg said.

Even if Congress averts that crisis, the impact on local shipyards of the $4.3 billion pinch this year in Navy spending because of the continuing resolution is painful and inexplicable, he said.

General Dynamics NASSCO employs about 3,200 people in San Diego to repair and modernize ships. “We have not seen anything official from the Navy, and we are not going to speculate,” on how the cuts might affect NASSCO, spokesman James Gill said Friday.

BAE Systems San Diego Ship Repairs employs about 1,350 people locally. The cuts in Navy ship maintenance “will have a huge impact on our operations. We certainly have been planning for it but have made no business decisions until things become a little more clear,” spokesman John Measell said Friday.

“We are still under contract for the work we currently have in the yard and have received no formal notification of cancellations,” he said. “We are aware that maintenance for certain ships could be delayed or canceled, but we are waiting for clarification on which ones, and when.”

The Navy announced maintenance delays on the destroyers Benfold, Higgins, Gridley, Sampson and Russell, the amphibious warships Peleliu, Green Bay and Rushmore, and the mine-countermine ships Devastator and Pioneer.

A big midlife upgrade can make or break the year for a ship repair company, but the Navy has an interest in helping those businesses stay afloat, said retired Vice Adm. Peter Daly, chief executive of the U.S. Naval Institute.

“If you have the ships, you’ve got to do the maintenance. But it will be disruptive and I would say big impact near-term,” he said. “Next year, they will build in the money for the maintenance and take it from somewhere else. But for this year their hands are tied.”

If the Navy can’t afford to repair or fuel its ships as needed, the military will eventually be faced with the same difficult choices of the cash-strapped post-Vietnam War era, said Blumberg, who served then.

“Since we tied the ships up and we’re not steaming them, and we grounded the airplanes because we have to save the fuel, the proficiency and the training of the people is going to get hurt,” he said. The Navy will have to cancel deployments or go ahead despite the fact that “ships are not in the state of maintenance that you want them and the sailors are not trained to the point where they can operate that equipment and do their mission downstream. That is the hollow force.”

The local impact of cutbacks from this year’s spending cap, according to the military advisory council, includes:

• The loss of between 4,000 and 5,000 ship repair jobs because of canceled work planned for April through September.

• Significant but not easily quantifiable job losses among the force of about 3,000 civil servants and 500 contractors employed at the Naval Air Station North Island aviation depot.

• An estimated loss of about 1,600 temporary Defense Department jobs, a hiring freeze and cuts in information technology and other base operations support.